Court Revives Penguin’s Copyright Case in N.Y.

MANHATTAN (CN) – With guidance from a state appeals court, the 2nd Circuit reversed a decision that would have publishers file copyright-infringement cases in the states where the violations allegedly occurred, as opposed to the state that the publisher calls home.

Penguin Group, one of the largest trade-book publishers in the world, brought suit against Oregon nonprofit American Buddha for purportedly publishing complete copies online of four Penguin books. American Buddha allegedly made the works freely available to the 50,000 members of its website, known as the Ralph Nader Library, and anybody with an Internet connection. A federal judge in Manhattan previously dismissed the publishing powerhouse’s case, asserting that Penguin’s purported injury occurred where the uploading took place, which was Oregon and Arizona where American Buddha maintains a business. On appeal, the 2nd Circuit then asked the New York’s top court to provide guidance on the issue of long-arm jurisdiction and injury given the largely undefined digital age. That court’s decision hinged on whether an injury is linked to the location where sales and customers are lost. “The injury in this case is more difficult to identify and quantify because the alleged infringement involves the Internet, which by its nature is intangible and ubiquitous,” the Albany court ruled in March. Court records show that the rate of e-book piracy has risen along with the increasing popularity of electronic book devices, such as the iPad and Kindle. As of 2010, customers shelled out close to $1 billion on e-books, according to a report by Forrester Research. The independent technology and market research company predicted that number will rise to $3 billion by 2015. “The role of the Internet in cases alleging the uploading of copyrighted books distinguishes them from traditional commercial torts cases where courts have generally linked the injury to the place where sales or customers are lost,” the ruling states. “The location of the infringement in online cases is of little import inasmuch as the primary aim of the infringer is to make the works available to anyone with access to an Internet connection, including computer users in New York.” Rejecting American Buddha’s argument that a finding for Penguin would “open a Pandora’s box” of out-of-state publishers being haled into New York courts, the 2nd Circuit recommended reinstating the case. The federal appeals court agreed Thursday and remanded the case back to District Court for another round. The books at the heart of the case are “Oil!” by Upton Sinclair, “It Can’t Happen Here” by Sinclair Lewis, “The Golden Ass” by Apuleius and “On the Nature and the Universe” by Lucretius.